In response to a lengthy NY Times article, the Casa Rosada’s Community Manager posted on the @CasaRosadaAR Twitter account what would soon echo throughout social networks: “Apparently bitcoin is disrupting our economy now (?)”
Apparently bitcoin is disrupting our economy now (?) https://t.co/8anSj29Nre
— Casa Rosada (@CasaRosadaAR) April 30, 2015
Argentina’s local Bitcoin community is aflame with the tweet, and some are even pondering if BitPay’s popular Mr. Bitcoin mascot should pose with the president.
Regardless of the mixed reactions towards the tweet itself, it is very clear that even in a busy election year the government has some time to read the Bitcoin news. Whether or not the Casa Rosada has goodwill towards Bitcoin has to be explicitly defined. No one denies the technology’s great potential for job creation, as is demonstrated by the increasing number of Bitcoin startups in Buenos Aires, some even with Silicon Valley funding.
The Government Stance So Far
Earlier in 2014, the Argentine Central Bank issued a cautious statement towards “virtual currencies” stating that they do not have legal tender status and are not backed by any government. The statement also expresses very valid concerns about its use for money laundering activities.
Given that Argentina is strengthening its money laundering regulations, it is not far-fetched to think that Bitcoin and its possible use cases as a money laundering tool are being analyzed in the Anti-Money Laundering labs of the Argentine Central Bank.
So far, the Argentine government’s official stance has been careful and to the point, admitting that in that moment there was no international consensus regarding the status of crypto-currencies. Given the current global weather for “virtual money”, there’s no reason to think that it will be hostile towards it. Countries such as Spain have already exempted Bitcoin trading from paying value added tax.
If a political party decided to go the Rand Paul way, which was approved by the US electoral committee, and accept Bitcoin donations in the upcoming elections, Bitcoin would surely be in the media spotlight.
Brokers, no more
The author’s eloquent article featured some very well-known members of the local scene, namely: Brenda Fernández, Argentina’s most famous broker; Dante Castiglione from the now established DigiCoins; and the cheerful Alberto Liver Vega from BitPay.
Cointelegraph has taken the time to contact them personally to know their current situation, and the landscape seems to have evolved since the author’s experience in Argentina months ago.
First of all, Castiglione’s operation (DigiCoins) has moved since his days as a broker, and after several cycles of hard work and reinvestment is now a registered start-up company with several employees, its own proprietary software, two offices in the important population hubs of Rosario and Buenos Aires, and a customer portfolio of four digits. It is also dutifully following KYC (Know Your Customer) and AML (Anti Money Laundering) laws with a specially hired compliance officer.
Fernández, who still operates as a broker, also speaks at events and is one of the most recognizable figures in the Argentine Bitcoin scene, mostly due to her keen knowledge of technical aspects and her market sense owing to her very active Bitcoin lifestyle. She really knows who uses Bitcoin, and how they use it.
Since his beginnings in BitPay, Vega has extensively traveled abroad and is the person responsible for the popular Mr. Bitcoin mascot. BitPay is almost the oldest Bitcoin company in the world.
What is really happening with Bitcoin in Argentina?
Bitcoin is creating jobs. The information and services economy in Argentina is having jobs created. Writers, Musicians, Illustrators, Community Managers, Virtual Secretaries, Teachers, Tutors, etc… can now work seamlessly and integrate to a globalized production chain, creating wealth for all the parties involved.
In words taken from Vega:
“We in BitPay are working for a foreign company, we are about to conform it here. Why it was formed here? Because the people that KNEW about Bitcoin were in Argentina, not in Brazil, not in Chile. BitPay is the oldest Bitcoin company in the world and it picked us. We’re now the largest payment provider, with a market share of more than 50%.”
Argentina has an exclusive competitive advantage because its people are very curious, proactive and technologically minded, in addition to the great advantage that using Bitcoin provides in the current inflationary context. European or United States citizens do not share the same urge to use virtual currency.
The competitive advantage that zero red tape brings for Argentineans is more than attractive. No banking fees, no difficult forms, no basic home banking, and very, very low costs. The early adopters phase is about to end, and Bitcoin is slowly becoming mainstream; why it is then, that Bitcoin hasn’t reached massive adoption in Argentina? In Alberto’s words:
“Argentina is the mecca of Bitcoin. But why? Then why is it that so few people are using it? Tell me, why is it then that every company is in the US and not here? The government? No. For example, the article says there no exchanges that work with banks. No, that’s not like it. Unisend, which is the only exchange that made the effort to operate with banks, is super legal. The problem is that people avoid it due to disliking the bank’s fees, and the market shrinks.”
Will Argentina continue to lead Latin America in Bitcoin adoption? And what will the government do to support this smooth job-creating technology? We will see the answers to these questions in the not-so-distant future.